The energy price cap legislation tasks Ofgem with setting a fair price for households using standard energy tariffs, based on profit margins of just 1.25pc.
The committee itself criticised the regulator for allowing the market to become “dysfunctional” in recent years but could effectively remove any substantive appeal against its twice-yearly price caps.
Ofgem admitted last week that its price cap for vulnerable customers would cut the savings it promised millions of households just four months ago by half, because the costs underpinning energy supply have climbed.
Ms Reeves said Ofgem has been too slow and reluctant to step in and protect the interests of customers in the past. The committee urged Ofgem to be “faster and more proactive in using its extensive powers” to safeguard consumers against overcharging in the future.
Energy UK piled further pressure on the regulator saying it is “important that the cap accurately reflects suppliers’ costs, most of which are out of their direct control”.
“Ofgem’s decision to raise the level of the prepayment cap last week shows how these costs can increase,” the trade group added.